Mosaic flagged setbacks from North America's rail hiccups as
the fertilizer giant unveiled a deeper-than-expected fall in profits, adding
that it was upbeat on prospects despite cutting its forecast for industry
potash volumes.

The fertilizer giant, the world's top phosphates group, unveiled
a slide of 43% to $218m in earnings for the January-to-March period, equivalent
to $0.54 a share, on revenues down 14.1% at $1.99bn.

Wall Street had forecast earnings of $0.59 a share.

The extent of the decline in profits reflected the slump in
fertilizer prices, particularly potash, values of which plunged after the
break-up in July of the Belarusian Potash Company cartel which controlled more
than 40% of world trade.

Mosaic achieved an average of $267 a tonne for its potash during
the quarter, down 29% year on year, and down 12% on the value achieved in the
October-to-December period.

'Logistical
constraints'

However, the group also highlighted a drag on sales volumes
from the rail logistical setbacks stemming from the cold winter, which forced
rail operators to run shorter trains, at lower speeds.

"Weather continued to create challenges in the operating
environment," said Jim Prokopanko, the Mosaic chief executive.

In potash, "both our international volumes and our ability
to restock in North America were impacted by logistical constraints".

Potash sales volumes, while up 400,000 tonnes year on year,
were at 2.4m tonnes, towards the lower end of Mosaic's forecast range for the
quarter.

Potash production dropped 300,000 tonnes to 1.9m tonnes –
equivalent to 70% of operational capacity, or 10 points below the target figure
– "as a result of rail shipping delays".

Potash downgrade

The comments come the day after it was revealed that Louis
Dreyfus, the grain trading giant, had filed a complaint with the Canadian
government over the service received from Canadian National Railway, the
country's biggest rail operator.

Mr Prokopanko flagged an improvement in Mosaic's own fortunes
on transport, saying that in the second half of 2014, "we expect rail
constraints to be resolved and potash prices to be stable".

Indeed, the group was "optimistic about the remainder of
2014, for both of our business units", phosphates and potash, he said.

The upbeat sentiment came even as the group lowered to
56.7m-58.1m tonnes, from 56.8m-59.1m tonnes, its forecast for global potash
shipments this year.

The downgrade reflected in the main worse prospect for
Europe and the former Soviet Union, for which the potash volume forecast was
cut to 10.7m-10.9m tonnes, from 11.3m-11.7m tonnes.

The revision follows a caution from US Department of
Agriculture staff in Kiev over the threat to Ukraine consumption of imported inputs,
such as many fertilizer types, thanks to a 40% depreciation in the country's
currency, the hryvnia.

'Robust demand'

Mosaic forecast potash sales volumes in the current quarter
of 2.2m-2.5m tonnes, in line with the 2.4m tonnes a year ago, with the average
selling price at $250-275 a tonne, down from last year but stable on the result
in the latest quarter.

For phosphates, sales volumes will rise from 2.9m tonnes to
31m-3.4m tonnes, at a price of $430-360 a tonne for diammonium phosphate - or
(Dap), a benchmark phosphate fertilizer product - rising for a second
successive quarter.

"Strong global demand pushed [phosphates] prices and margins
higher during the first three months of the year," Mr Prokopanko said, and
terming "robust" demand during the spring North American application season.

Nonetheless, after the below-forecast results, Mosaic shares
fell 2.6% t $1.28 in early deals in New York.